When we first started sounding the alarm on inflation a year ago, it was a problem that was barely on anyone’s radar as the Consumer Price Index was rising at just 1.4%. Many were more concerned about the possibility of deflation than the risk that prices could start rising out of control, especially after the Federal Reserve began hinting that it would be bringing its program of quantitative easing to halt.

But inflation appears to have bottomed this spring, with rising food and energy prices in particular pushing the rate of inflation above the Fed’s self-proclaimed comfort zone of 2%. Even the price index for personal consumption expenditures, the Fed’s preferred gauge, is at an 18-month high as inflation continues to heat up.

This issue we’re putting the spotlight on our top holdings that we think will be terrific long-term investments for those concerned about both hedging against the rising threat of inflation while still generating respectable investment gains.

Sanderson Farms (NSDQ: SAFM) has been our biggest winner by far with a gain of more than 50% since we added to our portfolios back in December. One of the leading poultry processers in America, the company has benefitting for soaring beef and pork prices over the past year as drought has brought the US cattle herd down to near record lows and a virus has killed millions of piglets in the country. Those rising prices have increased the demand for chicken, and that, coupled with relatively low feed costs, have helped propel Sanderson Farm’s profit up for the past four quarters, including a better than 100% gain in the second quarter.

Since it will take a minimum of two years for our beef stock to reach more normal levels and the process hasn’t even begun thanks to the ongoing drought in America’s key beef producing regions, chicken prices should remain highly competitive for some time to come. As a result, analysts have been steadily increasing their current quarter earnings estimates by more than 20% over the past month, while the full-year earnings outlook has risen from $7.62 to $8.58. That’s given the company’s shares huge momentum in recent weeks and the gains should continue in the months to come.

Sanderson isn’t resting on its laurels or taking high poultry prices for granted. America’s chicken stocks have been constrained due to a decline in the overall fertility rate of its breeders, and Sanderson teamed up with its leading supplier of breeders to find the cause. They found, interestingly enough, that the Ross male, the breed which accounts for as much as 25% of the nation’s chickens raised for slaughter, has a genetic issue which reduces fertility when the birds get too fat. By simply reducing the amount of feed provided them Sanderson can not only reduce costs, it can increase its chicken stocks as well.

As Sanderson Farms becomes more efficient even as it benefits from rising poultry prices, it is still a terrific long-term buy up to 115.

Norfolk Southern (NYSE: NSC) has been our second biggest winner, with a gain of 38.3% since it was added to the portfolio in September.

The railroad is one of the most efficiently run in the US, consistently out-earning its cost of capital and turning in high efficiency ratios. It is also one of the safest, without a major accident in more than a decade, though a 33-car freight train did derail recently in Virginia. There were no injuries or chemical spills though, as the train was primarily hauling automobiles and nail polish, and cleanup should be relatively straightforward. It has also invested heavily in growing its intermodal freight business to help reduce falling coal volumes, allowing it to run double-stacked cars from the East Coast to Chicago.

Right now the railroad is facing two outstanding regulatory issues: The Environmental Protection Agency has proposed greenhouse gas restrictions for power plants and the Transportation Department has proposed a rule to enhance tank car standards.

Both are known issues and haven’t slowed Norfolk Southern’s run so far this year, with shares up more than 13%. While coal revenues fell to 18% of total revenue last year from 23% in 2011, coal’s contribution to cash flow is far from trivial. That’s largely due to the railroad’s geography, since it serves coal states on the eastern seaboard where many of the nation’s oldest coal plants are located. If more stringent greenhouse gas emissions are put in place, at least some of those plants will have to close and cause a further drop in utility coal demand, which already fell by 10% in the first quarter.

The proposed changes to tank cars, which carry combustible liquids, don’t represent a potential direct extra cost to the railroads since tank cars are typically owned by customers. The Association of American Railroads, the industry’s trade group, actually supports tighter safety standards for cars used to transport combustibles since it reduces the industry’s liability. But retrofitting or replacing tank cars could potentially dent the railroads’ business because it will take some time to bring the tank car fleet up to standards, and fewer tank cars on the rails could hurt revenue in the short-term. Only about 15,000 of the 92,000 tank cars currently comply with the latest safety standards, bringing them up to code could cost as much as $3 billion.

Norfolk Southern is well-positioned to cope with those issues, though, and earnings should continue to gain momentum as the overall state of the US economy continues to improve. Earnings are expected to grow by better than 5% this year and 13% in 2015 precisely because a more buoyant economy should boost freight volumes.

Norfolk Southern Corp remains a buy up to 120.

While Tiffany & Co (NYSE: TIF) hasn’t posted a return as strong as some of our other holdings, it is still up by better than 17% since it was added to our portfolio in January, thanks in large part to much better than expected earnings. It reported stellar sales in its fiscal first quarter, up 13% to $1 billion with an 11% increase in same-store sales. Net earnings were up 50% as compared to last year.

Expansion into the Asia-Pacific region has been a key driver for the company, with total sales up 17% in the period while Japan alone saw a 20% surge, largely due to consumers buying luxury items ahead of an increase in the country’s sales tax. Sales in the American region and Europe grew by 8% and 9%, respectively.

Encouraged by its strong revenue and earnings growth its board authorized management to spend up to $300 million on repurchases over the next three years. Management also increased its earnings outlook after its phenomenal performance, boosting its earnings outlook for the full year from between $4.05 and $4.15 to between $4.15 and $4.25 per share.

Executing well on its Asian expansion, controlling costs and tapping into growing demand for luxury goods in emerging markets, Tiffany & Company is a buy up to 111.